One of my favorite life-lesson quotes is from Michelangelo who said: “The great danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark.” It’s a sentiment that applies to how I approach my own work and is reflected in our recent research study where we looked at the connection between business operations’ maturity and performance.
Lately, we’ve all had to work out how to make the best of our operations to keep the wheels of business turning. But we still want to innovate and grow.
For some business leaders, running a steady ship means caution first. But I think a bolder approach is more effective. In fact, there’s never been a better time to go all out for operational transformation.
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The four levels of operational maturity
We identified four levels of operational maturity: stable, efficient, predictive and future-ready. We found that the future-ready organizations—those that make operations more intelligent—can flex and gain staying power for better business results.
In fact, there’s money on the table—global profits could be US$5.4T higher if organizations moved up from stable, efficient, or predictive to future-ready.
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There’s never been a better time to go all out for operational transformation.
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Does this mean most organizations are aiming too low? Well, only 7% of organizations are future-ready. Almost two-thirds (62%) are accelerating digitization to support the drive for speed to innovation for processes, products and services—compared with just 36% of the rest.
By aiming high, future-ready organizations are on the fast track to operational transformation. In this way, they can maintain business continuity while turning organizational change into value.
What CEOs told us
Of course, organizations can be tech-savvy without being ready for the future. CEOs tell us that their organizations have seen an increase in automation (by 11 times) in the past three years. Yet, automation alone is not enough for CEOs to believe they are future-ready. Just 2% of CEOs reported that their organizations are currently future-ready and less than a quarter (21%) expect to be future-ready by 2023.
There does appear to be a link between executives who are focused on growth and the overall maturity of the organization’s operations. Across all executives, 77% who are focused on growth are from the top two operating maturity levels (predictive and future-ready). Whereas just 45% of executives focused on cost-cutting are in those same top two maturity levels.
And for those executives at the most senior levels, 40% of surveyed CEOs said they are focused on growth rather than cost-cutting, compared with 56% of all executives.
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Just 2% of CEOs reported that their organizations are currently future-ready.
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Even so, CEOs were more cautious across the board in the survey’s eight key measures of operational maturity (agile workforce, analytics, artificial intelligence (AI), automation, business-tech collaboration, data, leading practices and stakeholder experience).
Such caution is most evident when it comes to AI, where 35% of CEOs have currently achieved AI adoption in wide use or at scale compared with 60% of all executives surveyed.
Of course, the findings could be an illustration of the siloed nature of organizations. CEOs want to be prudent about the “big picture” of the whole business, rather than over-promise on its constituent parts. But perhaps this is where they are behind the curve in seeing the potential value of operational transformation.
In terms of embracing new technologies, a chief sales officer of a United States consumer goods organization was clear: “We are in a constantly demanding market, so if we don’t innovate, we will be crushed by the competition. And if we don’t outsource to increase our efficiency, then the cost incurred to produce will kill us.”
Each organization has its own way of handling its operating model demands. But today’s future-ready organizations proved themselves to be bolder and better. Here’s how:
- They know their ultimate goal and align technology, talent, data and processes with business strategy to improve their operating models.
- They automate at scale, augment human talent with technology and make decisions using better, more diverse data to unlock value.
- They use their ecosystem partnerships to bring complementary skill sets that help them achieve their end rewards.
Some organizations are already making progress with intelligent operations, too. For instance, a leading multi-national technology provider to businesses, governments, education and healthcare organizations across the United Kingdom and North America transformed its operating model to include a data-powered marketing approach. Integrating the organization’s fragmented data environment and digital user experience helped to provide a 360-degree view of sales leads across multiple channels and identify US$14M in new value.
Here are three ways that I think CEOs can aim high to achieve intelligent operations:
- Use technologies as an enabler. By using automation and processes that make them more nimble, organizations can free human talent and perform As a chief of supply chain in the automotive industry told us: “With such a flexible model, you always plan to serve and not just survive.”
- Respond quickly to seize value. What may have taken years to do in the past must now be done in months—especially when there is the added strain on supply, demand and the workforce from crises, such as the COVID-19 pandemic. Operational transformation can happen when organizations use technologies that are designed to help them expand and act fast.
- Mix and match with a hybrid approach. In our experience working with leading organizations upwards of 60% are already adopting a hybrid approach to their operations. These organizations combine many different types of services. Examples include: retained or localized services, shared services, global business services (integrating governance, locations and business practices across an enterprise) or using third-party providers. With this hybrid approach they are able to deliver value in line with the business strategy.
As the group operating officer for Accenture Operations, I’d be the first to admit running a business is complex. It’s a balancing act between technology, talent and processes and being resilient in the face of disruptive changes.
But I believe that nothing worthwhile is ever achieved without aiming high and testing the limits of what we can do. By transforming their operations, CEOs can make better business decisions to find more value and grow in the long term.
Read more fascinating insights from our research. Look out for more blogs from me on the impact of intelligent operations in certain industries, as well as further insights from the research and our experience.